Getting What You’re Worth

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Salary negotiation is a hot topic right now. This article in the New York Times has some good reminders for women specifically about negotiating for a fair salary, and describes some of the pitfalls women fall into. One of my go-to financial blogs Get Rich Slowly has numerous posts about the importance of salary negotiation. One important point these writers make is that it is always a good idea to negotiate. Regardless of what the employer offers, ask for more, and be willing to work for what you think you’re worth. The authors of Women Don’t Ask, published in 2003, cite numerous statistics about women’s incomes lagging behind men’s, and the authors state here that women don’t like to negotiate, and will actually pay more for things than men to avoid negotiating. The Huffington Post describes a scenario similar to one I experienced personally: being so excited about a job offer that you instantly say yes without thinking about your opportunities for salary negotiation. I was always so grateful to be taken seriously, given my lack of technical background and my BA in Psychology, that I have almost certainly undersold myself many times. Luckily, I have had several (male) managers suggest I ask for more money. Who knows how much I might have received if I’d asked for 10% or even 25% more than I did.

One of the beautiful things about the Systers community is the wealth of knowledge and experience that we share, so that what might be a daunting experience can become less intimidating with the help of someone who is familiar with the process. A Syster sent the message below asking for advice about negotiating for a fair salary. Here is the text of her post, followed by her summary (in her words) of the overall themes of the responses she received as well as some of the actual responses. Despite over 20 years experience in the job market, I found the responses informative and interesting. Hopefully you will too.

______________________________Salary Negotiation

Written by Amy (this name and the other single names are pseudonyms, to protect the privacy of these personal stories) based on conversations with her Systers.

Regarding job offers and negotiations: I have gotten myself into a predicament. I have never negotiated much of anything and find it intimidating. I’m about 8 months into my first job out of college. We were recently informed that the office is closing. I have been interviewing since then and have a few offers on the table. I’ve been in Philadelphia for almost a decade. My friends and family are here; I’m part of a great community, and I’m in a serious relationship. There are a lot of good opportunities for me here. I’m not inclined to move unless something amazing comes along. But I think it has!

Bay area company X has offered me a job. I have never even been to California and have no concept of reasonable compensation, but I did extensive research and landed on a general cost of living increase of 30-40%. I have a few offers in Philadelphia; I didn’t negotiate them but they are very close in terms of salaries and benefits. I figured this is my market value. So when it came time to negotiate, I was shooting for [best local offer]+30% as a target salary. The job posting said they had no money for relocation, so I wasn’t expecting anything above standard benefits.

Now came the negotiations (on the phone): Their initial offer was [best local offer]+11%, standard benefits, etc with a modest relocation package. I balked and explained what I was expecting, and my research. I was repeatedly told that my research was inaccurate, but I awkwardly managed not to accept and HR said they’d see what they could do.

The next day they countered with [best local offer]+17%, citing the potential for future raises and “But we have a really nice bonus rate!” when I objected and asked for my target salary. I was repeatedly told that my target salary (and even [best local offer]+20%) was “unrealistic” and they asked if I “was really going to hold out for the highest salary available”. So far, the HR person had been very nice/helpful and I was feeling guilty/greedy from the unexpected relocation money. I was really excited about this opportunity and didn’t want to risk it – I had read many horror stories of candidates trying to negotiate with companies only for them to rescind offers. So I accepted – a significant paycut. I did not negotiate any other benefits or relocation. But I tried to ignore the uneasiness and get excited.

It gets more complicated: I was also interviewing with Bay area company Y, whose process is much slower. When I got X’s offer, I emailed Y asking for a status update. I received no response and assumed they had lost interest. Fast forward to today, a month later: out of nowhere company Y makes me an offer, and it’s basically my target salary plus perks. But I’m not as excited about the job – and I’ve already accepted X’s offer.

Once I started really breaking down my new budget, I realize that I would be netting significantly less income after the increase in expenses. College is EXPENSIVE these days – and I went to a private school! – so while money isn’t everything, it would be foolish of me to take such a large pay cut considering my student loans. I do feel that I’d be happier at company X and know it’s a great opportunity, but I’m second-guessing the whole thing because I feel like I have sold myself short. I’m worried I’ll start at company X and have it hanging over my head, impacting my performance and self esteem.

I know this is not the worst situation to be in – I feel like I should just be grateful and “suck it up” with company X. On the other hand, I worked my ARSE off to get where I am today; I am a highly qualified candidate and believe I deserve to feel like I am paid fairly.

Specifically, I’d like to know:

1) How do I know my “market value”?
2) What do I do next?
a) Do I inform company X of company Y’s offer and ask for more? This seems like a crappy thing to do, but would alleviate my anxiety. I’m worried about them revoking their offer, as they’re already waiting a while for me to move.
b) Should I just keep my mouth shut, suck it up for now, and try to get a raise come review time?
c) Or should I take the money and run? i.e., rescind my acceptance at X to work for Y

3) What should I do differently, next time?

I’d really appreciate any advice you can give me.

Thank you!

**********************************
Amy received numerous (over 100) responses, and here she outlines the major themes of the responses.

The supportive ones:

A resounding response that 30% was definitely not too low of a cost of living adjustment, 40% is more realistic given the differences between Philadelphia and the San Francisco Bay Area.

Educate yourself / knowledge is power. Read the books ‘Ask For It’ and ‘Women Don’t Ask’. Do your cost of living research and don’t take an employer’s no for an answer about it.

Play perspective employers off one another. It’s just business for them, and in this you need to think about what’s best for you.

Negotiation is a part of life, and if you don’t bother, you are selling yourself short.

Your starting/early career salaries will impact the rest of your career (and the company’s opinion of you). Companies often value you as much as they pay you – so you should negotiate. And along with this – Consider that if a potential employerwon’t up the salary, this could be indicative of how well they are going to treat you.

Contact the hiring manager, not HR, when you go to renegotiate. The hiring manager is the one who is more invested in getting you on the team.

Get everything in writing. Raises, bonuses and other perks mentioned during the hiring phase often don’t materialize, or could even be false promises.

If the pay is so bad you’ll resent it, renegotiate it. Otherwise, learn from your mistakes and go with the job that makes you happy. You will have this job for years. Follow your intuition.

Don’t be ashamed or feel guilty to ask for what you’re worth (within reasonable industry averages and limits). If you’ve got this many offers on the table, you areworth it.

Keep in mind the type of company and compensation differences (startup vs a giant like Google, etc.) and weight them according to what you value most. Ultimately, it’s about honoring your own values and respecting the people you work for/with and feeling respected.

Large companies are the ones most likely to low-ball you. But it also depends on the budget for that hiring manager’s project.

The not-so-supportive ones:

I should be ashamed of asking for more, or even considering being this greedy.

I should be grateful for what I’ve got and don’t ask for more. (Also, from a few: but turn it down if I’m not happy and avoid the conflict altogether.)

I should apologize to the Systers for asking about this in the first place.

Renegotiating in this situation will look flaky or bring up red flags or possibly even burn bridges. Don’t be greedy.

Other helpful advice and links:

Practice negotiating. (This actually came in really handy, and I was less afraid.) Try to negotiate something every day, and work your way up to those ‘big ticket’ items. Ask your cable/internet/phone provider/local merchant for a discount. Negotiate a deal with your kids/neighbor/etc. Just ask! You’d be surprised how easy it is, and how much easier it gets. (Note from the editor: I’ve heard this elsewhere as well, and this has really helped me when giving presentations in front of large groups. I have no doubt that some of the intensity of entering a negotiating session could be lessened by taking the time to try out your statements ahead of time.)

Know what you want before you go into the negotiation. Know your “asking price”, your “target price”, and your “reservation price”. Have a good feel for which items you’re willing to negotiate or substitute – flexible hours, time off, benefits, etc.

Don’t hold back from playing one off the other. If you would work for X if they paid you like Y – tell X so and let them know you have another offer on the table. Can they match it? You can also try getting X to give you a early performance review (get it in writing) with possibility for increase in salary base.

Also consider going after other benefits – want more vacation to start? Decide now at what point you are willing to walk away – if they can’t reach it – walk away no guilt! Do not let that influence your decision! You have to live with this job every day for years – you better be happy or you will hurt yourself and the company you work for.

If you give up on X – are you really willing to commit to work for Y the next 2 years? If not, turn them down and keep looking.

BTW if you have 2 offers I’m betting you should be requesting 25% above median of whatever you think that is. […]

– Sarah Baker

[…] Keep in mind that what kind of salary you start with right now has the potential to affect your salary for the rest of your career. I think you need to weigh that as part of your decision between companies X and Y. It does sound like X is trying to short change you, which might be an indication of how they will treat you in the future, too. […]

– Andrea Abney

Have you *looked* at the cost of living in the Bay Area? Apartments go at about twice the price of those in Phil, gas costs significantly more (my brother sent me an email when he found gas for under 3.99 the other day) and there’s zero public transport and traffic is like nothing you’ve seen before (unless you’ve driven in LA, nothing in BosNYWash comes close – except maybe NYC – and they have good public transit). That is NOT to say you shouldn’t go at all. I’d be there still if family problems hadn’t intervened.

BUT keep in mind that the Valley is very much a meritocracy. They don’t offer more than they think you’re worth. They sometimes DO offer less. You would not be getting high offers if they didn’t think you were worth it. but that may still be low by local standards.

For pity’s sake, do the research properly. Salary.com, the bureau of labor data, Glassdoor.com, check out the numbers for the company if you can. LinkedIn can be a very useful resource…they probably won’t tell you what they make, but they’ll point you in useful directions. See if there’s anyone there for either company and msg them regarding the company practices. There are companies that are known for paying low and others that pay high, etc.

Bonuses should never be considered as part of your pay package. They may or may not be paid in any given year for reasons that have nothing whatsoever to do with your performance. Say, the company missed its numbers – probably the fault of over-excited C-level execs but you’re the ones who won’t get bonuses.

See if you can play Company B’s offer against Company A. If not, you go with Company B. Not the best outcome, maybe, but not the worst. Remember that your future paychecks all rely on what you’re making at this next job.

Most of all, though, you’ve learned something — never get to the possible offer stage without a clear understanding of how much you’re worth on the market. Check the numbers in the resources above, find job listings for comparable jobs that list pay offered, talk to people in similar positions (although people can be weird about this), Check cost of living numbers (look up apartment listings and go through a local paper on-line, etc). Negotiation starts when you ask for that + X%

Another thing you may learn is that even if a job is better except for money, it loses a lot of its charm as you consider the fact that they didn’t value you enough to pay you a decent rate.

And in answer to your question: Yes, you sold yourself short. Don’t do it again.

– Maggie

One thing I have found, even though it is so scary, is that when most companies see you have another offer, suddenly prices go up! I hate doing it (it feels so wrong) but some hr departments even have a policy of offering more for someone they want. You run the risk of having the offer rescinded, but raises aren’t guaranteed. You could try negotiating for a 6 month raise clause to a
salary that is better.
[…]
If you negotiate, that’s the risk. However you can always negotiate at X instead of just rescinding the acceptance.

Is it worth “selling out”? I personally took a lower paying job at a non profit because I felt like I would be happier there. But… it was still a very fair offer and not really impacting me. That’s only
a question that you can answer sadly. :(

Also, having been in the Bay area vs Philly, rents are incredibly high here, especially in San Francisco itself. The tech mini boom is causing a big rental crunch, so 30% seems low for a cost of living adjustment.

– Michelle

Congrats on two good job offers!

I’d go to the hiring manager at company x, hopefully someone you had good rapport with, and say, “Another company in your area has made me an offer and I’m having a hard time choosing. I really like your team, product, and environment better and feel like the job is a perfect fit for my skills. But the other company has offered me and equivalent benefits. Can match that offer? I’d really rather work for you.”

And then they can work the system at their company. DON’T deal with HR directly for the first contact in this phase of the negotiation. Deal with the hiring manager who likes you and is motivated to bring you on board; they can choose the “right” HR person to deal with, get clearance from upper management, whatever needs to be done. The HR people are there to protect the company, which includes not spending money, so they are NOT very motivated to match that new salary offer.

Once the hiring manager gets back to you with either a counteroffer or the news that they can’t increase their offer, no matter what it is, thank them and say that you need to sleep on it to make your decision, and that you’ll let them know very soon. Be a little “hard to get”. They *might* just call back a few hours later and give you the salary you want, but if you say “yes” right away, then they have no way to increase their offer to match the other company. I have had it happen where they called me back and offered me more money because “we don’t want to lose you to ”. That sort of negotiation now makes a BIG difference in your future pay, often for a long time.

If you do decide to go with company Y in the end, do so with a clear conscience. Be honest with the manager at company x. “I’m really sorry that I can’t accept this offer and I hope that our paths cross again because I’d love to work with your team. I appreciate everything you did to help me through the interview process.” Connect with them on LinkedIn. Really network with them in the future. And please make sure you send them a hand-written thank-you note! This happens all the time; candidates accept, get better offers, and move on. It’s part of how the process works.

Good luck, and keep us posted. Never, ever settle for a job that you will hate just for the money, but also don’t take the job you’ll love without asking them to improve your lot in life. If they can’t increase your salary, ask if they can increase the paid vacation to three or four weeks a year (that doesn’t cost them money, but in effect, you work many fewer hours, increasing your hourly rate), or otherwise improve some other benefit. Sometimes those adjustments are easier than cash money and just as satisfying to you.

– Julia Ziobro

I want to encourage you to give yourself the option to not frame the decision as one of “selling out” or not. You mention that Y’s offer feels more “fair”. And from what you’ve described they communicate more straightforwardly, and provide better pay and benefits, which may mean they value their employees more and are willing to invest in and keep them.

If I were in your position, I’d have some questions about the environment at X vs Y, and that’s what I would weigh against the more interesting work X has to offer. I’d also be thinking about whether Y is the kind of organization where I’d be able to move into work that’s more interesting to me over time. Or whether it would offer the kind of experience you’ll be able to take somewhere more interesting over time, along with a higher salary history. I also think telling X you have a competing offer is a great idea. Maybe they’ll match it.

I’m not advocating one over the other, just noticing that you put yourself in a hard place by looking at it as selling out or not.

Also, I just hired someone and waited 6 or 7 weeks for her to start. She was by far the best candidate, and it was well worth it to me to wait. So I wouldn’t feel bad about the time frame at all. IMHO, it’s not reasonable for anyone (X or you!) to expect you to relocate across the country in less time than that.

Good luck! Please post a follow up and let us know what you decide.

– Sharon Stern

You are just a kid, you aren’t hurting for the money, so keep your word and don’t be a flake.

– Lisa

2 ARCHIVED RESPONSES TO “GETTING WHAT YOU’RE WORTH”

Fiona Says:April 24th, 2012 at 7:09 pmeJoining Systers as a college freshman was one of the best decisions I made. I’m now a senior, and these stories I’ve read empowered me to successfully negotiate my offer. Just hearing about other people’s experiences really helped my confidence.

ks Says:August 17th, 2012 at 9:56 pmeMy husband got a job offer recently and tried to negotiate his salary. They were offering him an entry-level/just out of college salary, despite his extensive experience in a similar industry, as well as his doctorate. They said there was some wiggle room with salary, so he asked for a reasonable amount higher than the original offer, expecting they would come somewhere in the middle.
He was confident, explaining his value to the company, but not at all arrogant or unreasonable.

The company said they would discuss the salary the next day, but then spent the next few days postponing the conversation. When they finally spoke, they said they rescinded the offer because they felt like he should have just accepted the lower, entry level salary immediately, rather than trying to negotiate. They obviously spent those days finding someone who would accept their low salary. They told my husband he should have just been grateful to get the job whatever the salary, despite saying throughout the interview process how much experience and value he would add to their company.

So, no, negotiating is not always a good idea. But then again, if you don’t negotiate, you could get stuck at a job where they undervalue and underappreciate your worth.